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Results communications in 2018 will include presentation of results against 2017, as though the Group had�� owned the acquisitions made in 2017 for the whole of that year. Comparison of results on this basis will be termed “on a representative basis” and will provide shareholders with a results comparison representative of the Group having owned the acquisitions throughout 2017 and 2018. For these comparison purposes, the Group has previously issued the 2017 results on such a basis for both the six months ended 30 June 2017 and full year�� ended 31 December 2017.

Trading update ‐ ahead of closed period commencing 26 June 2018

• ��The business continues to perform well and trading is in line with our expectations
• ��Strong adjusted revenue growth from the Strategic Brand Portfolio, on a representative basis
• ��Continued strong market share growth, driven by the Global Drive Brands (GDBs)
• ��Adjusted revenue and adjusted profit growth, on a representative basis, expected to be weighted to the second half of the year, as the impact of a number of significant events affecting the comparison with H1 2017 unwind
• ��Good adjusted constant currency EPS growth, is expected to be impacted by a significant currency translation headwind of around 9% for the first half and 6% for the full year, assuming exchange rates remain unchanged for the remainder of the year

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The business continues to perform well, in line with expectations.

As previously announced, adjusted revenue and profit growth, on a representative basis, is expected to be skewed to the second half.

Strong volume growth in Pakistan following excise changes in the first half of 2017 and downtrading in the GCC is expected to drive greater first half geographic mix dilution. This is expected to unwind in the second half.

Volume continues to outperform the industry. We expect full year global industry volume to be down around 3.5%.

We expect our market share to continue to grow strongly, driven by the GDBs.

Trading in our key markets continues to reflect the trends discussed at the Preliminary Results in February, with the US, Pakistan, Bangladesh, Romania, Germany, Canada and Ukraine performing well and conditions remaining challenging in the GCC, Russia, South Africa, Malaysia and France.

In the US, we anticipate a good performance on a representative basis, after adjusting for the one‐off comparative impact on revenue from the disposal of stock related to the Natural American Spirit transaction. Lower US industry volume, principally in Q1, is expected to impact revenue in the first half. Share in the first half is expected to be stable following strong growth at the end of last year.

In Japan, the growth of the Tobacco Heating Products category has slowed, however, glo continues to grow and has a national share of 4.3%. With device supply constraints now lifted, we are on track for further Japanese and international rollouts in the second half. In vapour, our business continues to grow and Vype ePen3 is on track for a launch in Q3 in the UK.

The Group remains on track for another good year of adjusted constant currency earnings growth, on a representative basis, with the benefit of the US tax reform helping to fund significantly increased investment in Next Generation Products (NGPs).

As previously stated, by the end of 2018 our objective is to more than double our revenue from NGPs to substantially more than £1 billion.

If exchange rates stayed unchanged for the remainder of the year, there would be an adverse translational impact on operating profit, on a representative basis of 8% for the first half and 6% for the full year.

Good adjusted constant currency EPS growth, is expected to be impacted by a significant currency translation headwind of around 9% for the first half and 6% for the full year, assuming exchange rates remain unchanged for the remainder of the year.